– Can get significantly worse – VG
A family in Kristiansand will have to pay over NOK 14,700 in electricity costs in the second half of 2022, according to a calculation from the Ministry of Petroleum and Energy. That is NOK 8,800 more than the average for the past ten years.
In order to curb the high electricity prices, in December 2021 the government introduced an electricity subsidy scheme for households and housing companies (co-owners, housing associations, housing limited liability companies, etc.).
So far in 2022, the state has covered 80 per cent of the price above 70 øre per kilowatt hour.
This week, the support was increased to 90 percent. This is without VAT of 25 per cent. At a spot price of 70 øre, the cost to the consumer is thus 87.5 øre.
The scheme is estimated to cost NOK 23 billion until March 2023. The total sum will probably be more due to higher power prices than what was the basis of the calculation, the government writes on its website.
VG calculation: This is how much the state earns from the expensive electricity
Five power regions
Norway is divided into five power regions. The three electricity regions in southern Norway usually have higher electricity prices than central and northern Norway. In 2022, there have been new price records in the south.
In a written response to the Progressive Party, Oil and Energy Minister Terje Aasland (Ap) comes up with an estimate of how much more electricity will cost for an average family in south-west Norway in the latter half of 2022.
The calculation is based on an annual consumption of 20,000 kilowatt hours, which is the average consumption for a detached house:
NOK/month | 2010–2020 | Without support | After support | Support |
---|---|---|---|---|
July | 602 | 3,265 | 1,478 | 80% |
August | 645 | 5,617 | 2006 | 80% |
September | 775 | 6,777 | 1 876 | 90% |
October | 1,020 | 8,890 | 2,461 | 90% |
November | 1,288 | 11,223 | 3 107 | 90% |
December | 1,579 | 13,759 | 3,809 | 90% |
Total electricity bill | 5,913 | 49,531 | 14,739 |
Without the electricity subsidy, the electricity bill will be NOK 49,531 given today’s electricity price of 434 øre per kilowatt hour for the rest of the year, according to Aasland’s estimates. With the electricity subsidy, the price is reduced to NOK 14,739.
For comparison, Aasland calculates that the average price for the years 2010–2020 was NOK 5,913 (given 33 øre per kilowatt hour).
Even with electricity support, an ordinary household has to spend approximately NOK 8,800 more than the average in recent years, according to the calculation. In that case, the bill will increase almost 2.5 times.
Aasland has also made a secondary calculation, where the forward price is used as a basis for the remaining months in 2022. Then the electricity bill after support will be approximately NOK 7,900 more in the second half of the year compared to the last decade, the calculation shows.
Can ruin people
Storting representative Marius Arion Nilsen (Frp) is not impressed by the increased electricity subsidy. He believes that Aasland’s calculation shows that the electricity support is still too weak:
– Even with increased electricity support of 90 per cent above 70 øre per kilowatt hour, people now pay almost three times more than normal for their electricity.
– The electricity price comes on top of everything else that has become so expensive. It can ruin many people who now have to fork out many thousands of kroner per month.
Fears that the price could be much higher
He further points out that the estimate is based on the current electricity price.
– The analysts expect that the prices will be even higher this winter. The calculation can therefore become significantly worse.
Nilsen also points out that the current is particularly extreme for business:
– The price without electricity support, i.e. almost NOK 50,000 in six months for 20,000 kilowatt hours, is what business today pays.
– What kind of system should be introduced?
– Our proposal is a maximum price of 50 øre per kilowatt hour, which will apply to both households and businesses. In other words, 100 percent compensation for prices above 50 øre per kilowatt hour, as long as the power crisis lasts.
Keeps the arrangement
State Secretary Andreas Bjelland Eriksen (Ap) responds to the criticism from the Progress Party on behalf of the Ministry of Oil and Energy.
Eriksen emphasizes that the current support scheme creates predictability for how the electricity bill will be, while at the same time providing an incentive to save electricity.
– In addition, the government has decided to use part of Statnett’s additional income to reduce the network rent for electricity customers in southern Norway. Such a reduction in online rent will also affect people’s wallets.
Read more: Gives up to ten billion to avoid increased net rent
Statbyrå (SSB) is now reviewing the scheme to see if further central improvements should be made.
– We will return to what the final calculation will be in the state budget. But we will continue to have powerful measures as long as the crisis lasts. We must also discuss special measures for those who are now hardest hit, Eriksen states.
Will avoid pure cash transfers
When it comes to electricity support for business, Eriksen writes:
– The government is working closely with the parties in working life to find measures against high electricity prices for parts of business in southern Norway. But they must be targeted and must contribute to ensuring that the scheme secures jobs and does not end up as pure cash transfers to the business owners, as we saw several examples of during corona, concludes Eriksen.